Economic Crime and Corporate Transparency Bill

Chris Bryant Excerpts

Consideration of Lords amendments
Monday 4th September 2023 Commons Chamber

[Kevin Hollinrake]

Around 3,000 entities have not properly registered at this point in time. Enforcement action is being taken on them: some 100,000 communications already have gone out to those particular entities, and a number of fines have been issued—about half a million pounds in fines so far. We do not accept those numbers. We are happy to have a conversation with whoever has concerns about the legislation so far. We do not want legislation that cannot be properly enforced and implemented. It is important that we compare like-for-like to ensure this legislation is fit for purpose.

[Sir Chris Bryant (Rhondda) (Lab)]

I may have misheard, but I think the Minister said that enforcement activity is going on against 100,000 companies—he will correct me when I sit down—and that there have been half a million pounds-worth of fines. That would be £5 a company, would it not?

[Kevin Hollinrake]

It would be if the hon. Gentleman’s numbers were right, but that is not what I said. Three thousand entities are not currently registered, to our knowledge. Many of those will have already ceased to exist or will have disposed of the property they owned. We are trying to find out the exact numbers. That is about the enforcement action. We have had 100,000 communications with those 3,000 entities, and half a million pounds of fines so far, but those fines can rise exponentially if they continue not to comply properly with the legislation.

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[Mary Robinson (Cheadle) (Con)]

It is a pleasure to rise in support of Lords amendments 146 and 147, which introduce the power to strike out SLAPPs claims in relation to instances of economic crime. SLAPPs—strategic litigation against public participation claims—are described as

“legal actions typically brought…with the intention of harassing, intimidating and financially or psychologically exhausting opponents via improper use of the legal system.”

In essence, people who have such a claim brought against them are threatened into silence. They are a tool of intimidation and censorship, often used by wealthy individuals such as Russian oligarchs or by corporations against individuals such as journalists who rarely have the financial means to fight back.

SLAPPs are not brought with the intention of participants having their day in court; they are based on the power of inequality of arms and are intended to stifle free speech, with the allegations never seeing the light of day. For the purposes of this Bill, SLAPPs claims are defined as one where the claimant’s behaviour in relation to the matters concerned has or intends to have the effect of restraining the defendant’s freedom of speech, and that any disclosures they seek to restrain have to do with economic crime or would be made in the public interest to fight economic crime.

These amendments seek to give people more protection when facing a SLAPP claim in relation to economic crime only. They will be able to use a new early dismissal mechanism and, where a case does proceed, they will have the umbrella of a new cost protection regime. This matters because costs can be prohibitive when fighting legal cases, and indeed the financial risks are intended to deter people from fighting back. However, we cannot let people who seek to silence and intimidate win.

We should be concerned that, in 2022, the Coalition Against SLAPPs in Europe found that the UK was the top European destination for cross-border litigation, with 15 of 62 known transnational cases over a decade being filed here. Who knows, there may be more. One of the reasons we are in this position is that the UK has no anti-SLAPP legislation, and I therefore welcome the measures that are being introduced here.

Although the Bill concentrates on economic crime only, I encourage Ministers to make it the first step in bringing a stop to SLAPPs altogether. SLAPPs are not just a threat to freedom of speech and freedom of expression, they seek to stop so many other disclosures that are in the public interest.

As chair of the all-party parliamentary group for whistleblowing, I am committed to protecting and empowering people who speak out. I have been pushing for legislative change to ensure that people feel able, safe and supported to make disclosures that are in the public interest. Whistleblowers, as my hon. Friend the Minister knows, are pivotal in the fight against economic crime and fraud, with almost half of all fraud detected by whistleblowers. Because economic crime is often well hidden and difficult to trace, discovering it requires insiders to speak out and share their knowledge.

Take, for example, the £178 billion Danske Bank money laundering scheme, which was exposed only as a result of a whistleblower who had worked in the bank’s trading unit and who raised concerns about breaches of anti-money laundering procedures in its Estonian branch. His internal reports ignored, he turned to the US Securities and Exchange Commission. Once allegations made the news headlines, Danske Bank itself ordered an investigation that confirmed the whistleblower’s claims.

Although a worker may seek protection at an employment tribunal, journalists, who are often the target of SLAPPs, are not recognised as whistleblowers under UK law, and they are therefore afforded no protection. Yet due to the investigative nature of their work, they are among the most likely to acquire inside information and evidence of wrongdoing. At the moment our whistleblowing legislation, the Public Interest Disclosure Act 1998, applies only to workers and is meant to protect them from unfair dismissal or detriment at work that may result from their whistleblowing. Whistleblowers such as journalists, who fall outside our current laws and are prey to SLAPPs, will find support with these amendments where their disclosure relates to economic crime.

[Sir Chris Bryant]

I completely agree with everything the hon. Lady has said about SLAPPs and the importance of journalists effectively acting as an additional regulator, but they need the information. Does she also support the amendments that would ensure trusts cannot be a means of hiding information from journalists and others who might want to be able to reveal it?

[Mary Robinson]

I am grateful to the hon. Gentleman for bringing that point forward. As we know, this is about investigative journalists who want to get in there and get the information. Transparency is in the name of the Bill, which may answer his question.

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[Sir Chris Bryant]

The Government are insisting that we should keep the real ownership of trusts secret, and the problem journalists have is that there is not a proper exemption to enable them to find out the ownership that lies behind a trust.

[Mary Robinson]

I am grateful to the hon. Gentleman for that clarification. The important thing is that journalists do not find themselves called before the courts through SLAPPs and this type of litigation, and that is the point we are trying to make here. I am sure the Minister has heard the hon. Gentleman.

As has been said, SLAPPs are used to silence and cover up. To effectively root out economic crime, it is right that we address their use, but I think the Government can go further still by reforming the UK’s whistleblowing laws. In doing so, we could encourage more people to come forward with evidence of economic crime, secure in the knowledge that the system is on their side. We must have a system that recognises any person as a potential whistleblower, not just an employee, as our current legislation does. We must have a system that values whistleblowers, not one that ignores or punishes them. We must have a system that makes whistleblowers feel supported and valued.

I know the Government are currently reviewing the UK’s whistleblowing framework, and I will continue to push for the reform we need. Meanwhile, these amendments are an important step forward, and I am pleased to support them.